Your employer, a midsized human resources management company, is considering expansion into related fields, including the acquisition of Temp Force Company, an employment agency that supplies word processor operators and computer programmers to businesses with temporarily heavy workloads. Your employer is also considering the purchase of Biggerstaff & McDonald $($B&M$),$ a privately held company owned by two friends, each with $5$ million shares of stock. B&M currently has free cash flow of $$24$ million, which is expected to grow at a constant rate of $5\%.$ B&M$$s financial statements report short$-$term investments of $$100$ million, debt of $$200$ million, and preferred stock of $$50$ million. B&M$$s weighted average cost of capital $($WACC$)$ is $11\%.$ Answer the following questions:

k$.$ What are value drivers? What happens to the ROIC and current value of operations if expected growth increases by $1$ percentage point relative to the original growth rates $($including the long$-$term growth rate$)?$ What can explain this? $($Hint: Use Scenario

Manager.$)$

Assume growth rates are at their original levels. What happens to the ROIC and current value of operations if the operating profitability ratio increases to $5\mathrm{.}5\%?$ Now assume growth rates and operating profitability ratios are at their original levels. What happens to the ROIC and current value of operations if the capital requirement ratio decreases to $51\%?$ Assume growth rates are at their original levels. What is the impact of simultaneous improvements in operating profitability and capital requirements? What is the impact of simultaneous improvements in the growth rates, operating profitability, and capital requirements? $($Hint: Use Scenario Manager.$)$